Types of Financial Aid

There is some confusion about the different types of financial aid available to today's college students. One of the most frequently asked questions is the difference between grants and scholarships.

Grants and scholarships should be your preferred financial aid type since they are essentially free money that does not need to be repaid.

Grants
Grants are disbursed on the basis of financial need or to support a specific project, which is generally research. Most grants are federally sponsored and applying for them begins with the FAFSA.

Scholarships
Scholarships are an entire area unto themselves. Scholarships should be your most preferred financial aid type since they are essentially free money that does not need to be repaid. Scholarships are even better than grants, which can only be used to support very specific projects.

College Scholarships website  FinancialAidforCollege.com offers information and links for high school students.

Major Sources of Financial Aid for Connecticut Students  Helpful list of financial aid information for Connecticut Students. 

CT Department for Higher Education offers their own list of financial aid resources.

More financial aid resources.  Click here.

For more scholarship information.  Click here.

Loans

Loans must be repaid with interest. Click here for a more in-depth discussion of student loans.

This information was obtained from FinancialAidforCollege.com  www.financialaidforcollege.com.  More information can be found at that website.

FACTS about Loans
If you intend to borrow from a federal student loan program to finance your education, consult with your college aid officer to determine the application procedure at that particular college.

The most attractive educational loans are those targeted to financially needy students. These loans — Stafford Loans and Perkins Loans — require no interest or repayment while the borrower is in school.

Students who do not qualify for need-based aid also have a borrowing opportunity available in the federal Unsubsidized Stafford Loan Program.

Loans to families of college students are available from the Connecticut Higher Education Supplemental Loan Authority. Parents also may borrow through the federal PLUS Loan Program and a variety of supplemental educational loan programs which your college aid officer can tell you about.

As with any loan, make sure you fully understand the interest rates, repayment terms and tax implications. Find out whether interest charges are variable or fixed, whether the loan has forgiveness or deferment provisions, whether you can consolidate the loan with other loans, and whether it carries prepayment penalties. Borrow only what you need. Remember that college loans must be repaid even if you do not finish college.

Work Study Programs

In addition to providing much needed funds, work study programs can also provide you with great work experience. Co-ops in particular can help you land a job when you graduate and they can ensure you are happy with the major you select before graduation. This is a fact that can be vouched for by the many who quickly change careers after graduating from college.

While we do not wish to write volumes on the subject, our discussion of financial aid types would not be complete without mention of alternative financial aid programs. Military enlistment, employer support, and various tax credits may all be worth further investigation depending on your needs and interests.

Ivy League Schools Offering Tuition Assistance

Brown University Financial Aid Policy  The Brown Corporation approved a new financial aid policy that eliminates loans for students whose family incomes are less than $100,000, reduces loans for all students who receive financial aid and no longer requires a parental contribution from most families with incomes of up to $60,000. Beginning in the fall of 2008, the new provisions will apply to all current students who receive financial aid, including the incoming Class of 2012.

Harvard College Financial Aid Policy  Sweeping overhaul of financial aid policies designed to make Harvard College more affordable for families across the income spectrum. The new initiative focuses on ensuring greater affordability for middle- and upper-middle-income families through major enhancements to grant aid, the elimination of student loans, and the removal of home equity from financial aid calculations.

Stanford University Financial Aid Policy   Under the new Stanford University program, parents with incomes of less than $100,000 will no longer pay tuition. Parents with incomes of less than $60,000 will not be expected to pay tuition or contribute to the costs of room, board and other expenses. Students will still be expected to contribute their earnings from work during the summer and academic year.

Yale University Financial Aid Policy   The reduction in costs will be spread across a broad range of incomes. Families with incomes below $120,000 will see their contributions cut by more than 50%, while most families with incomes between $120,000 and $200,000 will see cost reductions of 33% or more.  Families earning less than $60,000 annually will not make any contribution toward the cost of a child’s education, and families earning $60,000 to $120,000 will typically contribute from 1% to 10% of total family income. The contribution of aided families earning above $120,000 will average 10% of income.